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To: Jim Willie CB who wrote (45305)	12/18/2001 2:40:45 PM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

Technology Stocks Climb But Rally Loses Some Steam By KATHERINE MEYER December 18, 2001 THE WALL STREET JOURNAL ONLINE Tech stocks rose Tuesday, but the rally appeared to losing steam as the Nasdaq Composite Index pulled back from its morning highs. In midday trading, the Nasdaq composite was up 9.10 to 1996.50, below its high of 2010.91 earlier in the day. The index advanced 1.8% in Monday's session. Morgan Stanley's high-tech index gained 0.40 Tuesday to 523.60, and the Dow Jones Internet Index advanced 0.80 to 63.80. Better-than-expected economic news gave stocks a boost in early trading. November housing starts surged 8.2% to a seasonally adjusted annual rate of 1.645 million units, the Commerce Department said Tuesday, which followed a revised 4% drop in October. Economists had expected housing starts to fall slightly. (see article). In corporate news, Interlogix surged $9.79, or 34%, to $38.50 on the Nasdaq Stock Market after new that General Electric's GE Industrial Systems agreed to acquire the electronic-security company in a cash and stock deal that values Interlogix at $38 a share. Shares of Siebel Systems, the most actively traded stock on Nasdaq, gained $2.40, or 9%, to $29.60 after Bob Austrian of Banc of America Securities said the software company's business has shown signs of strength in the current quarter. Mr. Austrian said his field checks indicate Siebel's quarter "closed strongly and on time on Dec. 15th." Siebel's fourth quarter ends Dec. 31, but it typically has based commissions for its sales force on deals completed by the 15th. News moved online-travel stocks. Priceline.com gained 47 cents, or 8%, to $6.04 on Nasdaq on news the name-your-price retailer struck a deal to have its travel products marketed on AOL Time Warner's Web sites. AOL Time Warner's America Online unit will promote Priceline through its "Travel Channel" and in travel-related areas of CompuServe, Netscape and MapQuest. Meanwhile, shares of fellow online-travel concern Expedia lost 36 cents to $37 on Nasdaq after news that software giant Microsoft planned to delay the sale of its stake in Expedia to USA Networks until the March or June quarter. The delay results from USA Network's agreement to sell its entertainment assets to a joint venture with Vivendi Universal. Elsewhere, Infineon Technologies and Toshiba ended talks on cooperating in making memory chips, the German semiconductor maker said, after Toshiba announced it will sell a key part of its chip business to Micron Technology (see article). Shares of Infineon rose 2 cents to $21.82, while Micron climbed $1.27 to $31.97, both on the New York Stock Exchange. Solectron dropped $2.64, or 18%, to $12.17 on the Big Board. The contract electronics manufacturer reported fiscal first-quarter operating profit that matched estimates, but lowered earnings guidance for the current quarter (see article). Standard & Poor's cut its corporate credit, senior unsecured note and senior unsecured bank loan ratings based on Solectron's deteriorating operating performance. Take-Two Software continues to peak investor interest. On Friday shares of Take-Two had dropped 30% after an analyst's note raised concerns about the quality of the software company's fourth-quarter earnings. But the stock rebounded Monday after the company said it expects to earn 70 cents a share for the first quarter of fiscal 2002, which is more than double the First Call consensus estimate of 30 cents a share. Shares of Take-Two were halted in Monday's session, but resumed trading before the session closed, finishing up $3.23, or 31%, at $13.56 in heavy volume on Nasdaq. On Tuesday Take-Two gained $2.34, or 17%, to $15.90. Jefferies & Co. slashed its rating on Take-Two to "hold" from "accumulate," while U.S. Bancorp analyst Tony Gikas upgraded the stock to "strong buy" from "outperform." "The bad news is behind Take-Two and is not ongoing," he said in a research note. EBay dropped 79 cents to $68.50 on Nasdaq. The company said its chief operating officer, Brian Swette, is leaving his post, but will remain as a head of development and adviser to chief executive officer, Meg Whitman (see article). The new post will be less than full time. AT&T fell 30 cents to $16.72 on the Big Board as investors mulled whether the telecommunications giant is going to sell its AT&T Broadband unit or keep it for the time being, hoping to score a better deal in the future (see article). Sonic Solutions rose $1.10, or 33%, to $4.41 on Nasdaq. The company said its MyDVD recording software is being bundled with Dell Computer's personal computers. Sonus Networks gained 80 cents to $5.35 on Nasdaq. The company has opened a regional office in Beijing and named former Juniper Networks sales executive Michael Li as country director to oversee Sonus' sales, marketing and support operations in China. Visage Technology gained 63 cents to $11.13 on Nasdaq. The company, which has licensed its face-recognition technology to the U.S. Army, said the Army has completed an initial installation of the software both in the U.S. and abroad. -- Marcelo Prince and Ross Snel of Dow Jones Newswires contributed to this article

To: Jim Willie CB who wrote (45305)	12/18/2001 4:24:11 PM
From: stockman_scott	Read Replies (2) \| Respond to of 65232

Housing strengthens in warm November... cbs.marketwatch.com Starts up 8% to incredible 1.65 million pace

To: Jim Willie CB who wrote (45305)	12/18/2001 4:38:24 PM
From: stockman_scott	Read Replies (2) \| Respond to of 65232

Polaris Venture's Metcalfe sees hot spots in turbulent VC world by Katherine Goncharoff Posted 02:16 PM EST, Dec-7-2001 TheDeal.com Technology related to the delivery of video over the Internet will be "the next big thing" in venture capital, according to legendary networking pioneer Robert M. Metcalfe. "With the growing popularity of MP3 files and audio over the Internet, it's inevitable that video telephone, video broadcasting and video-on-demand on the Web will become more popular," Metcalfe said in telephone interview Thursday. "I'm only connecting the dots." As the inventor of the Ethernet-the international local area networking standard — founder of 3Com Corp. and as of January a partner with Polaris Venture Partners in Waltham, Mass., Metcalfe's predictions are scrutinized. Other hot VC investment areas in the coming months, Metcalfe predicts, are any new technologies that improve the networking capability of Internet devices and the broadband access of corporate networks or large area networks. He is also bullish on nanotechnology, the manipulation and building of tools and micro-machines on a molecular level. "I have a term sheet on the table right now that we are seriously considering that involves an investment greater than $10 million in a nanotech startup," Metcalfe said. Metcalfe elaborated on comments he had made as keynote speaker at a Massachusetts Institute of Technology venture capital conference recently. This year, conspicuously absent from the event — attended by about 400 individuals and 35 venture capital funds, including Atlas Venture, Bain Capital Inc., Battery Ventures, Greylock, Amadeus and 3i Group plc — were talks on the once popular topics of e-commerce, B2B business models or Internet investing. But certain trends were noted. Among them, venture capitalists said liquidation preferences — that is, who gets which proceeds in the event of a merger, sale or liquidation — have become a subject of heightened interest among VCs as more and more investors find themselves liquidating their investments in the absence of an IPO market. And they noted a noticeable uptick in the number of deals where VCs demand what are known as participating preferred, or "double dip" shares upon investment. In that scenario, the holder of preferred stock gets a liquidation preference and then shares remaining proceeds with common stock holders. Other deal trends include the greater frequency of "pay to play" provisions in agreements, penalizing other VCs when they do not step up to fund subsequent rounds in a company. As a result, it has become more and more difficult for VCs to come to an agreement on later funding rounds. "A lot of preferences are in fact preventing a lot of good companies from growing. Ultimately, they prevent new investors from coming on board, and it's become a disincentive to invest," said Charles Lax of GrandBanks Capital. "What some VCs need to realize is that money is not made by creating a dividend structure that sucks air out of the company." Lax said his fund is negotiating the closing of an insider round that will allow management the option to buy back equity. That, he hopes, will induce management to expand the company. Conference participants also pondered the likely downfall of many of their peers. By Metcalfe's accounting, at least 300 of the 500 or so VC firms that sprung up during the Internet bubble years are now virtually dead or will be shortly.